On Nov 8, RBI had 25% of Rs 20 lakh cr being demonetised

New Delhi, December 19

On the day Prime Minister Narendra Modi announced that he was invalidating old high-value banknotes, the Reserve Bank of India had Rs 4.94 lakh crore in new Rs 2000 banknotes — one-fourth of the money the Prime Minister was putting out of circulation.

In information that was revealed in response to an RTI application by Mumbai activist Anil Galgali, the RBI said that it had Rs 9.13 lakh crore in old 1,000 rupee banknotes and Rs 11.38 lakh crore in 500 rupee notes on November 8.

In its place, it had 2,473 million pieces of the new 2,000 rupee notes on November 8.

Galgali said the federal bank was fully aware of the consequences of their decision, which, given the money that was being pulled out of circulation (86.69 per cent) and being put back in, seemed “neither prudent nor reasonable”.

"RBI was well aware of the gamble it was taking on a decision that would wreck havoc on lives of crores of Indian citizens. You need not be a financial expert to figure out this unwarranted hurry in demonetisation had to result in a financial crunch," Galgali said.

Oddly, the RBI refused to provide details of distribution of banknotes between November 9 and November 19, citing a provision in the Right to Information Act that allows a public authority to hold back information.

The RBI had recently uploaded details that could not be disclosed under the RTI Act, including distribution of currency to banks, on its website after a former information commission approached the Central information Commission against its decision to withhold some information.

Former information commissioner Shailesh Gandhi said in he complaint that RBI was breaching rules of the RTI Act by withholding information in certain categories.

"Effectively, it means that RBI arrogates to itself the right to lay down exemptions to disclosure of information in line with the objectives of the Act. This is the sole prerogative of Parliament, which has provided the exemptions to disclosure in Section 8 and 9 of the RTI Act," Gandhi said.

"This is illegal and is certainly usurpation of the powers of the commission. RBI has no power under law to declare which information is exempt. That is the role of the commission.”

"This is a very dangerous and illegal action, which could cause complete disruption of the working of RTI, if other public authorities follow this example. Public Information Officer of public authorities will then be following the illegal proclamation," he said seeking the intervention of transparency panel to set aside this move. — PTI